I am writing a book on The Future of the Music Business (Backbeat 2005). The book will discuss the new laws and business practices applying to digital music, analyze the labels’ battles with electronic piracy, propose a detailed solution, discuss how new artists and entrepreneurs can take advantage of the new technologies, and focus on new business models.

If I were to offer my prediction for the future of the music business I would start with where we are now: Income from recorded music has declined 20% throughout the world in the last several years. Many blame unauthorized file sharing. But others blame the bad economy, competition with other diversions such as video games, and finally, the diminishing quality of the music. My opinion is that, yes, file sharing is a factor contributing to the music industry's decline, but that it has been exacerbated by artificially high prices for CDs and the record companies’ slowness in embracing new business models made possible by the new technologies. In addition, rock & roll re-vitalized pop music starting with Chuck Berry and Elvis and growing into the era of the Bob Dylan, the Rolling Stones, Beatles, Madonna and Michael Jackson. During those years the music business grew 10-fold. The music became a more important component in our culture and our identity than ever before. Imagine the "sexual revolution" without the music! The music became part of the boomer's very identity and their vision of the world and their future. Rock and pop are not dead but they no longer are at the vanguard of our culture. We do not have a new Beatles or Rolling Stones. Not because new artists aren't as talented, but music is not as vital to the culture. This generation's kids have been brought up on video games and the computer. The music is just not as huge in their life as, for example, Bob Dylan was to the lives of their parents.

That said, the future? Well, Internet delivery of music will continue to grow, in both the legal and unauthorized formats. The real issue is when will the ISP and electronics industries will begin to cooperate in policing against unauthorized music. It's not the kids, it’s the huge corporations that control the pipe through which we receive free music (the ISP’s), and the machines that allow everyone to listen and keep free music (computers containing CD burners, blank optical discs, MP3 players). They have been able to resist liability for allowing people to use the Internet to get free music. And part of the reason they have been able to get away with it (in addition to their political and economic leverage) is the content owners themselves. If the labels' strategy included getting a reasonable royalty from the ISPs and the electronics business instead of, or at least in addition to, suing kids and grandmothers, the record companies might be able to get the voluntary cooperation of the ISPs and computer manufacturers. After all, the hardware and ISP companies could easily pass the cost on to the public. And since so many people buy these products and services, the cost could be quite small to each consumer and at the same time compensate the record companies for lost sales.

I think this will eventually happen, especially as a more Internet friendly and technologically sophisticated generation takes over the helms of the major labels. I see a statutory license or blanket license like those implemented by ASCAP and BMI allowing the legalization of file sharing. There will be more music for less money. New artists will make more money from this system as it usually includes paying artists 50% directly instead of the normal model of 10-20% of retail AFTER recoupment of production, video and other costs. Under the standard recording agreement, very few artists ever receive record royalties. On the other hand, there may be less money for the superstars and the top music industry executives under a blanket license system. They depended on "blockbuster" album sales of CDs priced at $18 dollars or more. Since the price of music will be less, they may make less money. But who cares if Mariah Carey doesn't make another 60 million?